NU Online News Service, Sept. 9, 3:00 p.m. EDT
Two executives of a now liquidated Miami-based insurance company have been arrested and charged with filing false or misleading financial statements, said the Division of Insurance Fraud.
Luis M. Espinoza, former president and chief financial officer of First Commercial Insurance Company (FCIC), and Rene M. Cambert, former vice president and chief operating officer of the company, were charged with eight first-degree felony counts.
The former executives signed false financial statements--which were submitted to the Office of Insurance Regulation--that misrepresented the company's assets and surplus.
Mr. Espinoza and Mr. Cambert face up to 30 years in prison on each count, said the office of Florida Chief Financial Officer Alex Sink, whose Division of Financial Services oversees the insurance fraud unit.
Ms. Sink's office said it opened an investigation of FCIC and an affiliated company, First Commercial Transportation and Property Insurance Company, when each was ordered into liquidation in August of last year. The CFO's office said it found FCIC sold more than 2,000 auto service warranty policies that were not reflected in their books, records and financial statements.
FCIC wrote workers' compensation, commercial auto, general liability and commercial multiperil policies in Florida and Georgia. Together the companies had about 18,000 policies in force.
Ms. Sink said the Division of Insurance Fraud, Division of Agent and Agency Services, Division of Rehabilitation and Liquidation, and the Office of Insurance Regulation were involved in the investigation.
In 2009 FCIC reported a net loss of about $9.5 million and a combined ratio of 125.75, according to Highline Data, a part of Summit Business Media, which owns National Underwriter.
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